OPK - NASDAQ

Hello, and welcome to the OPKO Health Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

Thank you, operator, and good afternoon. This is Yvonne Briggs with Alliance Advisors IR. Thank you all for joining today's call to discuss OPKO Health's financial results for the fourth quarter of 2025. I'd like to remind you that any statements made during this call by management, other than statements of historical fact, will be considered forward-looking and, as such, are subject to risks and uncertainties that could materially affect the company's results. Those forward-looking statements include, without limitation, various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2025, that was just filed earlier today. Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, on February 26, 2026. Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Regarding the format of today's call, Dr. Phillip Frost, Chairman and Chief Executive Officer, will provide opening remarks. Dr. Elias

Good afternoon, and thank you for joining us today. OPKO exited 2025 with tremendous momentum as we executed on the priorities we laid out earlier in the year. These included positioning our Diagnostics business for a return to profitability, advancing our ModeX pipeline, leveraging nondilutive funds from strategic partnerships to offset our R&D budget, and strengthening our balance sheet. We're looking forward to the year ahead as we have multiple value-creating catalysts for 2026 and beyond. At BioReference, 2025 was transformative, with the closing of the second asset sale. In September, we completed the sale of our oncology division and related testing services. This allowed us to focus on BioReference on its core clinical laboratory business in the New York and New Jersey region, as well as correctional health and our 4Kscore test nationally. This divestiture streamlines our infrastructure and reduces fixed costs while freeing capital to support our broader strategic objectives. BioReference is now positioned to meet our goal of sustained profitable growth in 2026. We believe that our more focused footprint, combined with the accelerating adoption of 4Kscore, give us a clear path to modest revenue growth and improving margins this year. On the therapeutic side, ModeX continues to be a central component of our long-term strategy. We now have multiple clinical-stage programs, an EBV vaccine that's partnered with Merck, our proprietary multispecific immuno-oncology and immunology candidates, including those intended for immune rejuvenation and for the immune-impaired. In 2025, we also began an important collaboration with Regeneron that aligns our deep antibody discovery capabilities with our unique multispecific platform to pursue targets in metabolism, oncology, and immunology. The value of this collaboration potentially exceeds $1 billion in milestones alone. Regeneron is responsible for reimbursing ModeX for its work in creating antibody candidates, utilizing ModeX's proprietary platform, and for funding all development and commercial efforts for candidates it selects for further development. From a financial perspective, we entered 2026 with a strong cash position that was bolstered by asset sales, BARDA funding, partnership payments, and positive operating contributions from our international pharmaceutical business. This has allowed us to invest meaningfully in our R&D portfolio while returning capital to shareholders through share repurchases. Last year, we bought back over $109 million in common shares and convertible notes. We look forward to the year ahead as we advance the ModeX pipeline with multiple clinical and partnership catalysts and continued focus on operating efficiencies as BioReference returns to profitability. With that overview, I'll turn the call over to Elias.

Well, thank you, Phil, and good afternoon, everyone. I'll start with ModeX. ModeX is now firmly established as a clinical-stage platform company spanning vaccines, oncology, and immunology. We have 3 programs in the clinic already, and 2 more entering the clinic over the next few months. Our EBV vaccine is partnered with Merck, includes our 2 antigens in combination with Merck's adjuvants, and Merck enrolled over 200 subjects in the Phase I trial that is evaluating safety, tolerability, and immunogenicity, enabling further development by Merck. Our lead immuno-oncology candidate, MDX2001, is a tetraspecific T-cell engager directed at 2 tumor antigens, cMET and TROP2, and 2 T-cell activators, CD3 and CD28. This candidate continues to progress through Phase I dose escalation in solid tumors. To date, we have dosed more than 25 patients across multiple tumor types and have reached dose levels that are approximately tenfold higher than the starting dose with acceptable safety. We're now refining the final dose and regimen to be used in Phase Ib expansion cohorts, focusing on specific tumor types. MDX2004 is our first-in-class multispecific immune rejuvenator for advanced cancers. This trispecific molecule simultaneously engages CD3, CD28, and 4-1BB to stimulate T-cell activation, proliferation, and persistence, with the goal of restoring the immune system. By restoring and maintaining T-cell activity, this immune rejuvenator may address a broad range of cancers by potentially reversing immune dysfunction associated with chemotherapy, chronic illness, infections, and aging. MDX2004 entered Phase I late last year in Australia and subsequently in Israel. With MDX2003, we are now developing a tetraspecific antibody that binds CD19 and CD20 on cancerous B cells and CD3 and CD28 on T cells. This is in line with emerging data showing the benefit of targeting both CD19 and CD20 in difficult-to-treat B-cell lymphomas and leukemias. MDX2003 is designed to maintain efficacy even if one B-cell marker is lost or greatly reduced, which is a common way for tumors to escape CD19-only treatments, and to build in CD28 co-stimulation so that T cells can stay active and able to kill cancer cells longer. We presented a poster at the ASH Annual Meeting in December, which described our preclinical findings. We have received regulatory IND approval in Australia and we will begin first-in-human trials in a few weeks for cancer. But I should note that this tetraspecific antibody also has potential to treat diseases associated with autoimmunity, an indication we're separately considering for entry into the clinic. A highlight of the fourth quarter, as Phil said, was the announcement of an agreement with Regeneron, which brings together their extensive library of clinically validated monoclonal antibody binders with our multispecific engineering platform to pursue 4 initial programs across metabolism, oncology, and immunology, with potential to expand beyond the initial targets. Under this collaboration, Regeneron will fully fund preclinical and clinical development and commercialization for selected assets, and OPKO is eligible for research, development, regulatory, and commercial milestones that could exceed $1 billion, as well as up to low-double-digit royalties on global sales. Our joint teams are actively working towards nominating lead candidates, with the goal of achieving the first milestone of these programs as these programs move into formal developments. Now turning to infectious diseases in the immune-impaired, our BARDA-supported programs for multispecific COVID-19 and influenza antibodies continue to move forward. We recently received IND clearance from the FDA for MDX2301, our COVID multispecific antibody, which is aimed at high-risk immunocompromised populations, and this program is to enter the clinic in the first half of 2026. Our influenza program against both flu A and flu B is in the pre-IND stage. We're currently evaluating the lead clinical candidates in challenge models to prioritize one for further clinical testing, with potential incremental funding from BARDA. In 2025, we received $28.5 million in nondilutive funding from BARDA for these 2 programs, and a total of $54 million since inception, and BARDA will assume the cost of the clinical trials. Over the past 3 years, we've also been building an in vivo CAR-T platform that we believe represents the next generation of cellular immunotherapies. And like traditional CAR-T approaches, our platform uses multispecific antibodies to greatly expand potential applications by targeting our proprietary lipid nanoparticles to any desired cell type and enabling the creation of multispecific chimeric antigen receptors, showing excellent B-cell depletion and safety in nonhuman primate experiments. We view this flexible, differentiated, and unencumbered technology as a unique asset within our portfolio, generating significant interest from potential partners as we enter the late stages of the pre-IND process, hoping to enter the clinic either late this year or the beginning of 2027. During the fourth quarter, we continued to advance OPK-88006, an analog of natural dual GLP-1/glucagon incretin oxyntomodulin towards the first-in-human phases, and we are in the late stages of the pre-IND work to study healthy and presumed metabolic dysfunction-associated steatohepatitis, for short MASH, participants, as both a weekly injectable product and, in partnership with Entera Bio, a once-daily oral formulation, which has been selected based on encouraging oral bioavailability in nonhuman primates. In addition, under the collaboration with Entera, we recently announced a program to develop a first-in-class oral long-acting PTH tablet for patients with hypoparathyroidism. This program combines OPKO's proprietary long-acting PTH variants with Entera's proprietary N-Tab technology. OPKO and Entera will each hold a 50% ownership interest in this program and will each be responsible for half of the program's development costs. Given the favorable PK/PD data announced last December, we're accelerating the development time line of this product and expect to file an IND application with the FDA mid-this year. Now our international pharmaceutical operations continue to be a source of steady cash flow and operating income. In 2025, global pharmaceutical product sales grew by 17% versus the prior year quarter, and I'll let Adam go through the numbers in more detail. But our partnering strategy continues to provide meaningful cash flow, and we're pleased that our partner, Lilly, has brought mazdutide to the Chinese market, and we received our first royalty payment in the fourth quarter. Finally, turning to our diagnostic business. In mid-September, we completed the sale of BioReference's oncology assets to Labcorp, transforming BioReference into a streamlined, regionally-focused clinical laboratory with a national specialty testing franchise anchored by 4Kscore. We now operate with a more efficient footprint, supported by correctional health nationally, and also an expanding menu of higher-margin services. In 2025, the post-transaction remaining operations represented approximately $300 million in revenue. Fourth quarter testing volume in the BioReference business, excluding the divested oncology assets, grew slightly, and we continued to realize the benefits of our cost reduction initiatives, including a workforce reduction of roughly 29% from the previous year to approximately 1,400 FTEs and other targeted operational efficiencies. These efforts have significantly improved our margins and support our expectation that BioReference will deliver positive operating income and cash flow in 2026. Of note, our 4Kscore test remains a key growth driver. Fourth quarter volume increased more than 6% year-over-year, and we expect the updated label, which does not require a digital rectal examination anymore, to support continuing momentum and entry in the primary care market. In third quarter last year, FDA approved this labeling change to dissociate the elevated PSA from suspicious nodules for the use of the 4Kscore. The intended-use population are men ages greater than 45 with age-stratified elevated PSA, or men without elevated PSA but a suspicious nodule. Most of the PSA screening are performed by primary care physicians, and the age-stratified elevated PSA and the precision of the 4Kscore test results would facilitate physician's decision to further assess the probability of clinically significant prostate cancer before a biopsy or MR imaging decision. We view 4Kscore as a valuable, differentiated franchise that can generate meaningful revenue and profit as we expand payer coverage and educate both urologists and primary care providers on its clinical utility. So collectively, our diagnostic transformation, our clinical progress across the company, and high-quality partnerships have positioned us as a more focused, therapeutically driven company with multiple near and midterm inflection points. With that, I'll turn the call over to Adam to review our financial results and outlook. Adam?

Thank you, Elias. Capital allocation remains our top priority as we ended the quarter with $369 million in cash and cash equivalents and restricted cash, which is more than sufficient to fund our ongoing operations and development plans while we also returned capital to our shareholders. Our strong cash position allowed us to repurchase 9.8 million shares during the fourth quarter of 2025. And for the full year, we repurchased 34.6 million shares for approximately $47 million. We have approximately $113 million remaining under our buyback authorization and expect to accelerate our repurchases over the short term. We deployed over $109 million in convertible note and common stock repurchases during 2025 and almost $230 million since the start of 2024, demonstrating our commitment to strengthening our balance sheet and returning that capital to our shareholders. Let's turn to the financial performance, starting with our Diagnostics business. Q4 was our first full quarter since closing our second transaction with Labcorp, and we are encouraged by the progress the team has made. Revenue for Q4 2025 was $71.1 million, including $7 million from our 4Kscore test, which grew in revenue by a little more than 16% compared to 2024's $6 million. Revenue in Q4 2024 was $103.1 million, with the year-over-year decline primarily due to revenue attributable to the Labcorp transaction that closed in September. Revenue from our retained business declined principally due to test mix changes as we shifted some of our unprofitable but higher-priced esoteric testing to our strategic partners, which was partially offset by slight volume increases. Total costs and expenses were $89.4 million, down from $124.8 million last year, reflecting the September 2025 Labcorp transaction, as well as the continued efforts to rationalize our cost structure to align with our focused geographic footprint and testing offerings. Included in operating expenses were $5.8 million of nonrecurring expenses related to reducing our headcount, asset write-offs, as we transition into our new operating footprint. Our Diagnostics operating loss was $18.3 million, compared to $21.7 million in Q4 2024, and depreciation and amortization came in at $4.1 million, down from $6 million in 2024. Revenue from our Pharmaceutical segment was $77.4 million in Q4 2025, compared to $80.5 million in the prior year. Revenue from product sales increased to $43.7 million, up from $37.4 million, reflecting foreign exchange tailwinds in the 2025 quarter, as well as higher sales volumes in our international operations. As we continue to focus on the profitability of Rayaldee, the gross-to-net improvements that we have realized in 2025 have resulted in meaningful positive cash flow from operations while maintaining our overall revenue levels. Rayaldee contributed $8.8 million during Q4 2025, compared to 2024's $9.1 million, reflecting lower government rebates during the 2025 period, partially offset by an approximately 17% decline in volumes. Our Pfizer gross profit share was $12.5 million, reflecting a 30% increase to 2024's $9.6 million. The fourth quarter of 2025 reflects the highest gross profit share recorded to date and reflects Pfizer's progress on the global commercialization of NGENLA. During Q4 2025, we recorded $7.2 million of revenue from our new collaboration with Regeneron, while the 2024 period included $12.5 million of milestone payments from Merck for our EBV collaboration. In addition, BARDA funding was $6.9 million, compared to 2024's $11 million, reflecting activity levels for our infectious disease antibody programs that BARDA supports. The 2024 period included a higher level of CMC activities, while the 2025 period reflected activities in preparation for our upcoming Phase I clinical trial for MDX2301. Finally, the fourth quarter of 2025 included $4.3 million paid by Eli Lilly for royalties on mazdutide, which is being commercialized by Innovent in China. This reflects royalties on sales from July to December 2025. As a result, IP and other revenue was $33.7 million compared to 2024's $43.1 million. Costs and expenses for our Pharmaceutical business were $88 million, up from $82.6 million, reflecting our investments in our R&D programs. R&D for Q4 2025 totaled $32.4 million, up from $29.8 million in the 2024 quarter, due to our increasing ModeX development activities. As a result, our pharmaceutical operating loss was $10.7 million, compared to last year's operating loss of $2.1 million. Depreciation and amortization was $18.3 million, which was consistent with 2024's $18.1 million. Our consolidated financial results include total revenues for Q4 2025 of $148.5 million, compared to $183.6 million in the fourth quarter of 2024. Our consolidated operating loss for Q4 2025 of $38.3 million, compared to $33.1 million for the 2024 period. The 2024 period benefited from the Merck milestone payment, which was approximately $5 million more than 2025's Regeneron milestone payment. Our net loss for Q4 2025 was $31.3 million, or $0.04 per share, compared to net income of $14 million, or $0.01 per diluted share, in Q4 2024, which included the benefit from gains of certain of our underlying investments. Looking forward to our outlook for the first quarter of 2026, we expect total revenue to be between $125 million and $140 million, with revenue from services of $71 million to $75 million, and this range reflects several of the weather impacts that have already occurred in January and February in the Northeast, which have already impacted our volumes by $3 million to $5 million. We expect pharmaceutical product revenue of between $38 million and $45 million, and we expect IP and other revenue to be between $15 million to $20 million, including Pfizer's gross profit share of $5 million to $6 million. The first quarter reflects the reset of the global revenue base and in prior years has been negatively impacted by gross-to-net adjustments and inventory revaluations that Pfizer records. Total costs and expenses are expected to come in between $170 million to $180 million, excluding any onetime restructuring costs, with our expanding investments in R&D to come in between $30 million to $32 million, partially offset by $7 million to $9 million in collaboration funding, and depreciation and amortization expense of approximately $24 million. Moving to the outlook for the full year, we expect total revenue of $530 million to $560 million, with revenue from services contributing $300 million to $312 million, and pharmaceutical product revenue of $160 million to $170 million. Other revenue from our partnering and collaboration agreements of $70 million to $80 million, including Pfizer gross profit share of $34 million to $37 million. Total costs and expenses are expected to be in the range of $725 million to $750 million. Our full year investment in R&D is expected to be between $125 million and $135 million, offset by $22 million to $26 million in BARDA funding and reimbursement from Regeneron under our collaboration agreements. Finally, depreciation and amortization expense is expected to be approximately $100 million in 2026. And as I mentioned earlier, we have approximately $113 million authorized to repurchase shares of our common stock. We expect to continue to accelerate our repurchase program over the next several days and weeks, continuing to focus on our investments into our R&D programs with capital being allocated to our repurchase program. That concludes our prepared remarks. Operator, let's open the call to questions.

[Operator Instructions] Our first question comes from Maury Raycroft of Jefferies.

It's James on for Maury. Congrats on the progress in the quarter. I'll just start with MDX2001. Can you discuss the timing of a potential data disclosure and how you're setting expectations for the proportion of patients from the 25 that you've dosed so far, how many of those could be evaluable for efficacy? Also, can you confirm whether you still plan to advance to the sixth dose level or whether you're seeing sufficient activity at the fifth dose level to begin backfilling certain dose cohorts? And should we be thinking about these disclosure as first half or second half event?

So in terms of the dose, I think we are at the dose that we were perceived. We are adjusting the regimen, how many micrograms per week or every 2 weeks, we're adjusting that right now. We will not go to a much higher dose level based on the information we have. We have dosed 25 patients. We do see signs of efficacy. It's too early, obviously, to report formally, but we will announce the results of our Phase Ia trial in an upcoming conference and enter Phase Ib for the tumors that show the most promising signs of efficacy. And that will probably be advancing so that we will have results that we can share by the end of 2026.

And then just another quick one on NGENLA profit share. It's increased to $12.5 million this quarter, consistent with the upward trajectory in weekly prescription trends that we've been seeing. Can you provide more color on the key drivers of the profit share increase? And what are the assumptions underpinning the guidance for profit share of $34 million to $37 million in '26?

James, thanks. So we've seen good continued growth globally for Pfizer. Really, what drove the fourth quarter increase was certain regions have moved up in the overall tiering structure. So in one of the regions, they actually hit the third tier. So the overall gross profit percentage sharing has been moving up in those regions. We've also seen Pfizer continue to take market share, again, on a global basis and increasing it in markets where they've historically been behind. So we're pretty pleased with where they've been able to head, and in the fourth quarter came in ahead of where we had expected, based on the growth rates that they've been able to deliver. So we see the $34 million to $37 million as being achievable at current growth rates and certainly could accelerate should they have some more wins on a global basis.

Our next question comes from Brian Cheng of J.P. Morgan.

Maybe just first on the BioReference side of the business. Can you give a bit more color in the growth that you're seeing, especially in the 4Kscore diagnostic test segment? Is the 6% growth that you saw here driven by particularly momentum in the primary care setting? And how should we think about just the stability of this growth trajectory, especially in the 4Kscore diagnostic test? And then I have a follow-up.

So Brian, we have not made any meaningful effort yet into the primary care setting. While we have the FDA label change, we're still working with payers to ensure coverage. So the volume increases have all been coming from the work within the urology field. So we'll expect to continue to push that growth upwards and think it can accelerate as we make progress with payers. The overall revenue growth came from improved revenue cycle management and selling into the right payer mix. We've continued to see overall benefits of the 4Kscore and expect that to grow at a high-single-digit, low-double-digit pace into 2026, and that could accelerate as we make progress within the primary care setting as payers come along.

And just on the Merck partnership for the Epstein-Barr virus vaccine, we noticed that there are additional studies being performed. What are those specific studies that will move this program to move into the Phase II phase? And any sense of the timing when those studies will be completed?

I'll defer to Gary Nabel, who is the leader of the collaboration with Merck. Gary, can you respond?

Yes. I'd be happy to give you some more color on that. The studies that are ongoing at the moment are designed to give us a little bit more information on the EBV-naive patients. The initial Phase I took all comers. And since the rates of seropositivity are so high in the U.S. and throughout the world, and the vaccine ultimately is intended for patients who've never been exposed to the virus, we'd like to see a little bit more data on that seronegative population because they'll be the subject of Phase II. So the other activity that's ongoing is to see if we can reduce the age of inclusion in the trial. In the current Phase I, it was age 18 and older. While we're getting material ready for Phase II and beyond, we can now take this opportunity to reduce the age of entry down to 12 years of age. So it's really positioning ourselves for more success and the most relevant formulation to succeed in the prevention studies when they begin.

Do you want to talk about the timing also, Gary?

Yes. In terms of the timing, I expect by the end of the year, we would have most of the data that we need to make the decisions. And I think we're looking at a time frame for Phase II that would start next year, not in this current year.

Our next question comes from Yale Jen of Laidlaw & Co.

I'm just going to follow up on the EBV. In terms of the first data readout with the study already completed, do you anticipate Merck to provide that? And the second follow-up on this question really -- this part is really that has Merck made the final -- made the definitely go/no-go decision, and the current study is simply just to supplement or extend that versus the go/no-go decision has not yet officially made? Then I have a follow-up.

Yes. I'd say the short answer to your question is that it is a decision for Merck to make and to announce. So I don't want to get too far ahead of the curve. What I will say is that the data we've seen thus far is encouraging. And I think that we, at the moment, really want to just make sure that everything is in place so that when we start the Phase II, the Phase II goes seamlessly and beyond, that we can go straight from Phase II to Phase III to the launch using the same batches and the same preparations of the vaccine. So what I can tell you is that we are encouraged, but the final decisions really should be coming from Merck, and I don't want to get ahead of ourselves in that regard.

Appreciate that. Maybe just another question here, really. In terms of the collaboration with Entera, we noticed that there's also a GLP-1/glucagon combo assets. You guys seem to have not yet talked much about it. Could you reveal some information on that one and the current status of that one as well?

So the GLP-1/glucagon is what we call oxyntomodulin in our report, and that's the name that is used for that. So it's pretty much at the very late stages of IND submission. I think in terms of the oral formulation with Entera, we're pursuing that given the results we had in December, which are very, very promising. And in terms of the injectable, we're getting ready to enter Phase I once we get the IND cleared.

Congrats on all the progress in the ModeX side.

Our next question comes from Edward Tenthoff of Piper Sandler.

I'm really impressed with so much going on at the company these days, and the improvements in the balance sheet, too, to pay for all of this research. I wanted to ask a little bit about the in vivo CAR-T, and it really is an interesting opportunity for the ModeX technology. Can you elaborate a little bit more in terms of how you're delivering the construct so that you can express the CARs on either T cells or other specific cells?

Yes. So what we've developed here is really a unique approach to in vivo CAR-T, characterized by a few factors. Number one, we found a way to conjugate covalently the targeting antibodies that are on the surface of the lipid nanoparticle. So we're using lipid nanoparticles, which can have a cargo of either mRNA or DNA. And our ability to target with multispecifics allows us to be able to target T cells, B cells, NK cells. So it's a very versatile platform, which is very interesting. We have advanced the program in terms of the CMC and as well as the nonhuman primate experiments that are really necessary to achieve IND progression. So the characteristics of this in vivo CAR-T really are quite fascinating because the possibilities are enormous, because the CAR-T receptor itself, the chimeric receptor itself, can be actually multispecific as well. As you know, currently, they are all monospecifics, but we've been able to achieve both monospecific CAR-Ts as well as multispecific CAR-T development. So we believe, and others do, and we've had a lot of interest -- incoming interest on this platform-that this asset is really something that is, in my view, a large component of the value of ModeX at this time.

Yes. Very, very interesting. I appreciate that color. And if I may ask just one additional question, also on MDX2004, the immune rejuvenator. I'm thinking about this almost as like an immunostimulatory agent. How do you envision developing it because it could have very broad utility?

You're referring to MDX2004? Is that what you're talking about?

Yes, correct.

Yes. So MDX2004 is pretty much a rejuvenator of the immune system. As you know, many patients have exhausted immune systems when they fight cancer and they receive multiple treatments, chemotherapy and other immuno-oncology drugs. And what we found is that the need is to really reinforce the immune system in these situations. As you know, PD-1 is a checkpoint inhibitor. So what it does, it removes the brake on the immune cells, the T cells in particular. But that doesn't guarantee that the T cells are going to be effective, because you remove the brake, but the car may not advance, right? What MDX2004 does, it is an accelerator. It really provides energy, gas, if you will, to rejuvenate the T cells and the stem cells and the memory cells so that the immune system can rev up and continue its fight against cancer cells. In terms of development, we're going into both patients who have been -- cancer patients who have been treated in multiple lines and testing whether or not a rejuvenation of the immune system will really reignite the positive anticancer effectiveness of the immune system, right? In addition, we're doing it in patients who are PD-1 naive and patients who've had PD-1s in the past, but where the effects of the PD-1 has basically faded. So that's the first step. So we have a 2-arm trials with PD-1 naives and PD-1 previously exposed, and then we're really testing whether or not it's a tolerable molecule that can be administered without too much safety issues, and observe whether or not it can prolong or rejuvenate the response -- the immune system response. So far, we have dosed 8 patients, and things are going well.

Our next question comes from Yi Chen of H.C. Wainwright & Co.

This is Eduardo on for Yi. I was just hoping if I could get you guys to repeat the specific clinical milestones for MDX2001 and MDX2004 in 2026, just to have some clarity there.

Well, so MDX2001 is pretty straightforward. It's completion of the dose regimen and entry into Phase Ib, right? That's really what it is. And then for MDX2004, we're doing the escalation -- the Phase I escalation. We passed the first step, and we're going into the second. And there are multiple steps that are planned, which is Phase Ia, which we hope to complete by -- within this year, and determine what the optimal dose is for this therapy. I'll point out the fact that this therapy may be effective in more indications than just tumors, simply because you have many patients who are immunosuppressed for reasons other than harboring a cancer. So Phase Ib for MDX2001 and the Phase Ia for MDX2004.

And then shifting over to the BioReference margin expansion and the expense bridge, I think the guidance said $725 million to $750 million in total expense, which seems a little high following the divestiture. Just wondered if you could add some more color there in terms of the OpEx for the new BioReference.

Adam can cover that. Adam can you cover?

Yes, sure. So we would expect, Eduardo, the overall expense base to continue to decline at BioReference as we've continued to work the overall operating efficiency upwards and starting to work the margin profile up. Really, where the expense expansion is coming from is within the R&D efforts. And it's going to be dependent on some of the successes that we've been talking about in other programs and the timing of where they start, that's where the expense expansion is. Everything else from the operating company side, we should see stable or reductions.

This concludes our question-and-answer session. I would like to turn the conference back over to Dr. Frost for any closing remarks.

Thank you all for participating and for your good questions. We look forward to meeting with you again after the first quarter to discuss those results. Thank you again and have a good evening.